Wacky IK arm Movement
Yes you need to unparent the IK controller, otherwise it creates a bug because the bone that is controlled is not supposed to control its master. 


Also:


I would put the controller vertically so that you don't confuse it with the hand.
Parent the hand to the controller if it's not already.
If you want the hand to stick to the forearm, give it a Copy Location constraint with the forearm as Target with a Head/Tail value of 1 so that it sticks to the tail and Space > Pose Space &lt;-> Pose Space.